Indonesian Mining Association


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Papua-Freeport Reach Agreement

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JAKARTA – Papua Provincial Administration and PT Freeport Indonesia have reached agreement on the release of 9,36% stake owned by Freeport Indonesia.
"Both parties have agreed. We just need to decide on the criteria," said Bambang Setiawan, Director General of Mineral and Coal (Minerba) at the Energy and Mineral Resources (ESDM) Ministry on Thursday (1/6) in Jakarta.

Bambang said business negotiations were underway between Freeport Indonesia management and Papua Province. ESDM Minerba Directorate General has also ascertained it will not intervene in the financing scheme for the acquisition. “That is their business. We will only receive a report on the progress of negotiations between Papua and Freeport,” he said.

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Investments in Mining Industry May Reach $3.2b In 2011

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By Rangga D. Fadillah

The Energy and Mineral Resources Ministry said it expected investments in the mineral and coal mining sector to reach US$3.2 billion this year, a slight increase from last year’s $3.18 billion.

The ministrys director general for minerals and coal, Bambang Setiawan, said coal mining would remain the largest draw for investors sector due to soaring coal prices.

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Transfer of State Assets

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By Fahmi AP Pane
Director of OPTIMASI (Public Organization for Information Transparency and Strategic Assets Management in Indonesia)

For the umpteenth time, mining companies in Indonesia are carrying out corporate actions using assets belonging to the state and the people of Indonesia as collateral, indeed selling them to foreign businesses overseas.

The most recent corporate action of the kind was carried out by Badan Resources on December 28, when it acquired nine coalmining concessions held by Hthabi Bara Utama and Prime Mine Resources, and swapped them for a 57 percent interest in Australian mining company Kangaroo Resources Ltd, for a total transaction value of 277 million dollars. The nine coalmining concessions have an estimated total reserve of 116 million metric tons, with a natural resources potential of five billion metric tons.

Earlier, an even bigger transaction had taken place between oil and gas giants Chevron (USA) and Sinopec (China) involving the Gendalo-Gehem natural gas megaproject in East Kalimantan. Imagine, in this six-billion-dollar marine gas project, Sinopec acquired an 18-percent stake held by Chevron in the Makassar Strait, Rapak, and Ganak blocks valued at 680 million US dollars.

Ironically, as explicitly stated by Dow Jones Newswires (on December 2) there was no information available on the financial terms and conditions of the agreement. Nor were either Reuters or Financial Times able to obtain significant information. To date, no information has been forthcoming on the status of these public assets in the form of as yet to be mined submarine gas.

Instead, information openness was more apparent in the transaction among Bumi Resources, Berau Coal Energy, and the company owned by Nathaniel Rothschild, Vallar Plc, which was more in the nature of a shares swap.
Under Law Number 22 of 2001 concerning Oil and Gas, Article 4 paragraphs 1 and 2 and Article 6 paragraph 2 item (a) stipulate that oil and gas are strategic natural resources under the control of the state, which ownership shall remain with the state up to the delivery point or sale of such oil and gas.

In the same vein, under Law Number 4 of 2009 concerning Minerals and Coal Mining, Article 4 paragraph 1 and Article 92 stipulate that minerals and coal are national assets controlled by the state, whereas Mining Operation Permit (Izin Usaha Pertambangan /IUP) or Specific Mining Operation Permit (Izin Usaha Pertambangan Khusus /IUPK) holders may only acquire right to their ownership after paying exploration fees or production fees.

Albeit such provisions do not fully safeguard Indonesia’s public assets and strategic resources, they should still be honored by mining companies including Chevron, Bayan, Bumi, and others. At any rate, these physical assets belonging to Indonesia still in the ground should not be pledged as security nor should they be sold.

Admittedly, Law Number 25 of 2007 concerning Capital Investment, specifically Article 8 paragraph (1) allows the transfer of assets to any party as the investor so desires. However, paragraph (2) states that investors may not transfer assets established by law as assets controlled by the state.

Indeed, Law No 4/2009 Article 93 paragraph (1) stipulates that IUP/IUPK holders may not transfer their permit to another party. Meanwhile, from paragraphs (2) and (3) it may be inferred that even corporate actions involving transfer of company ownership and or shares in an Indonesian stock market must first be informed to the minister, governor, or regent/mayor as the case may be.

It could well be that such corporate actions by mining companies are carried out to gain access to international financial networks, to facilitate entry into commodities markets, for transfer purposes, and other repatriation purposes.

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Mining Investments Target Too Small

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Indonesia Mining Association (IMA) executive director Priyo Pribadi considered the government investments target in mineral and coal to not depict the real condition. "There are thousands of new mines every year. Investment should be a lot too," said Priyo last weekend.

The Ministry of Energy has set a target of USW$3.2 billion for the mineral and coal sector in 2011. This figure is not too far from the figure for 2010, which reached US$3.18 billion. In addition to investments the administration also plans to increase mineral and coal production to meet international market demands.

Terakhir Diperbaharui ( Senin, 25 Juni 2012 03:16 ) Selengkapnya...
 
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